Construction employment added 4,000 jobs on net in January, according to Associated Builders and Contractors. On a year-over-year basis, the industry has expanded by 178,000 jobs—an increase of 2.2%.
The construction unemployment rate rose from 5.2% in December 2024 to 6.5% in January. The national unemployment rate for all industries fell to 4% in January from 4.1% in December 2024 as the U.S. economy added 143,000 jobs.
Nonresidential construction added 4,400 jobs in January, with growth in two of the three subsectors. Nonresidential specialty trade contractors added 5,600 jobs, and nonresidential building added 1,100 jobs. Heavy and civil engineering lost 2,300 jobs in January.
“Construction hiring has slowed to a crawl since October, with the industry averaging just 6,000 net new jobs per month,” said ABC Chief Economist Anirban Basu. “This is largely a reflection of weakness in the residential sector, which actually lost 200 jobs in January. Given the ongoing effects of high interest rates and the sharp decline in the number of housing units under construction, residential employment should continue to pull back over the next few quarters.
“Slowing demand for labor on the residential side of the industry could very well benefit nonresidential contractors” Basu continued. “Average hourly earnings for construction workers were up 4.1% on a year-over-year basis in January. While that’s still fast wage growth by historical standards, it’s also the smallest annual increase since 2021. With a majority of contractors expecting to expand their staffing levels over the first half of the year, according to ABC’s Construction Confidence Index, the availability of workers who would otherwise work on the residential side of the industry should help nonresidential wage growth return to healthier levels.”
